2018 (2) TMI 1707 - ITAT MUMBAI

Deemed rental income - Addition of notional annual letting value of unsold flats held as stock in trade - Income from house property - Held that:- In the case on hand before us it is an undisputed fact that both assessees have treated the unsold flats as stock in trade in the books of account and the flats sold by them were assessed under the head ‘income from business’. Thus we hold that the unsold flats which are stock in trade when they were sold they are assessable under the head ‘income from business’ when they are sold and therefore the AO is not correct in bringing to tax notional annual letting value in respect of those unsold flats under the head ‘income from house property’. Thus, we direct the AO to delete the addition made under Section 23 of the Act as income from house property. - Decided in favour of assessee.